• Advanced data analytic tools achieved higher average recovery from erroneous returns for YA 2019 – YA 2021 
• Reduce potential errors for Form C-S through Seamless Filing From Software (#SFFS)
• Companies are reminded to file the YA 2023 Corporate Income Tax Returns by 30 Nov 2023

The Inland Revenue Authority of Singapore (IRAS) recovered $79 million in taxes and penalties between Jul 2020 and Jun 2023 from companies with erroneous Corporate Income Tax (CIT) Returns filed for the Years of Assessment (YA) 2019 to 2021.

Use of Advanced Data Analytic Tools for Compliance

Cases selected using IRAS’ advanced data analytic tools achieved on average about 3 times recovery per case ($15,770) compared to cases selected from random sampling or from qualitative analysis ($5,329).

Of the cases audited, two-thirds were picked up through IRAS’ compliance audit programmes, where companies posing higher risk of wrongful tax reporting are selected for audit with the aid of advanced data analytic tools. The remaining cases were identified from random sampling and qualitative analysis, such as environmental scanning and tip-offs, to ensure a comprehensive audit coverage.

IRAS takes a risk-based approach in identifying and prioritising key compliance risks, and develops suitable compliance programmes to address these risks. Advanced data analytics tools are used to profile companies according to their compliance risks. For example, through the effective use of data and Artificial Intelligence, an analytical model was developed to detect anomalies in the CIT Returns for audit review, which resulted in sharper identification of high-risk companies and notable tax recoveries. The risk detection capabilities of these tools are enhanced over time through continuous feedback of insights from past audits.

4 Common Tax Filing Mistakes to Avoid

Through the audits, IRAS has observed 4 common tax filing mistakes:

1. Understatement or omission of income due to incomplete recording of revenue
2. Incorrect claims of capital allowances on non-qualifying assets
3. Failure to apply the arm’s length principle for related party services 
4. Poor record-keeping and incorrect claims by family-owned/ managed companies

Reduce Potential Errors for Form C-S Through Seamless Filing From Software (#SFFS)

IRAS encourages companies with simpler tax affairs to use #SFFS to file their Form C-S, which will help to reduce filing-related errors. With #SFFS, small companies qualifying to file Form C-S can look forward to a hassle-free tax filing experience with just a few clicks of buttons. Companies can enjoy the following key benefits of using #SFFS:

1. Automatic conversion of accounting data to tax data through an automatic conversion tool
2. Reduction of potential transposition errors by eliminating the need for manual data entry into myTax Portal
3. Productivity savings of up to 95% (from 8 hours to 15 minutes for preparing and filing of CIT Return)
4. Digital record keeping which reduces manual efforts and storage required for physical records

In addition, from YA 2023 to YA 2025, companies can enjoy further benefits when they submit their Form C-S with #SFFS:

1. Automatic extension of filing due date by 15 days (i.e., from 30 Nov to 15 Dec)
2. Waiver^[1] of penalties for errors made due to unfamiliarity with the use of the software

Companies can find out more on IRAS’ webpage on Seamless Filing From Software (#SFFS).

File by 30 Nov 2023

IRAS reminds all companies, including those with no business activities or those in a loss position, to file their YA 2023 CIT Returns by 30 Nov 2023, unless they have received a waiver to file the CIT Returns. All directors are reminded to ensure that their companies’ tax returns are filed on time. Failure to file the CIT Return by the due date is an offence under the Income Tax Act, for which companies may be subject to penalties of up to $5,000.

Companies which require further assistance on the YA 2023 tax filing can visit the IRAS website, contact IRAS via myTax Mail, or call the helpline at 1800 356 8622.

Inland Revenue Authority of Singapore

^[1] The waiver does not apply to errors made without reasonable excuse, through negligence, or with wilful intent to evade tax.